Insiders on the Outfield

A champion of recording artists plays ball, talks shop in Amagansett

| August 28, 2012 - 12:16pm

Rather than meet in a stuffy conference room or at a business lunch, music industry attorneys like Bob Donnelly opted to get together recently on an Amagansett baseball diamond instead.
Morgan McGivern

Last Saturday, the lazy late-summer afternoon was punctuated by the sounds of bat hitting ball and ball hitting glove. On the Amagansett School field, a group of men and women were engaged in a spirited but friendly game.
This first annual meeting — on the diamond, that is — of music industry attorneys lay at the end of a long and winding road shaped by the seismic changes in the music business over a relatively brief period.
Bob Donnelly, an attorney with Manhattan and Minneapolis firm Lommen Abdo, is a 34-year veteran of the music industry. On Saturday, as colleagues played catch on the school’s field, the Sag Harbor resident considered the broad range of events that have transformed the industry and brought the players together on a baseball field.
Mr. Donnelly is known as a champion of recording artists. He was part of the team that won a judgment in unpaid royalties for the artist Ronnie Spector against her former record label. Former New York State Attorney General Eliot Spitzer credited him with a case that resulted in payment of $55 million in back royalties by labels to artists. And he was a prominent figure in the repeal of the changes to the “works-for-hire” provision of the Copyright Act of 1976, which paved the way for recording artists to take ownership of their master recordings after 35 years. The act went into effect in 1978: As 2013 approaches, many recording artists are indeed moving to claim their master recordings.
“Gigantic,” Mr. Donnelly said of the implications. “Right now, 60 percent of all [record labels’] sales are deep catalog.”
This effort on behalf of songwriters and musicians — few of them among the most business-savvy members of society — reflects a lifelong love of music, evident in the attorney’s often self-deprecating remarks. “Like so many people in the business side of the music business, I’m a hopelessly failed musician,” he said. “I took guitar lessons when I was in the sixth grade, and at the end of the semester you’d play that concert for your parents. I had one song, three chords. I played it so badly that even my mother, who to the day she died was my greatest apologist, could find nothing redeeming to say. When your mother thinks you suck at something, that’s the time to change course. I then became the kid that had every record, even every imported record. Whether you hated me or not, you had to invite me to your party because I had the best record collection.”
Mr. Donnelly attended Providence College on a track scholarship, and then pursued a master’s degree in counseling psychology at Columbia University, “which, I like to joke, I use more dealing with artists than I use my law degree.” The School of Law at St. John’s University was next, after which the young graduate worked for New York State Assemblyman Edward Meyer’s campaign for Congress.
“Right after the campaign,” Mr. Donnelly said, “I got a job that enabled me to negotiate a deal with Steve Leber and David Krebs, who had just left the William Morris Agency and were forming what grew to become the biggest management company in America, Leber/Krebs. They offered me a job to become general counsel. I was intensely flattered, until I discovered they intended to pay me about one-eighth what I was currently making. But it was a full-time music position, and that’s what I was looking to do. I was very lucky, because the first band that Leber/Krebs signed was an unknown band from Boston called Aerosmith. On their heels came Ted Nugent, AC/DC, Def Leppard, Parliament-Funkadelic. I was in-house there for about three years and then went off on my own, with them as my first client.”
With the birth of grunge in the early 1990s, the music industry rode Nirvana and other artists to unprecedented prosperity. But as the decade drew to a close, a software called Napster was spreading like a virus across college campuses and, quickly, across the record-buying public. With Napster and the programs that quickly followed, digital audio files could be freely shared by anyone with a computer and modem. The music business would never be the same.
“During the 1990s, we would increase the price of a CD by a buck each year, and everybody would say we were going to hit the wall, there would be price resistance,” Mr. Donnelly said. “To our utter amazement, sales went up. While the film business, the theater business, all the similar entertainment industries were going up and down, we were going straight up. An arrogance developed, along the way, that we were smarter than everybody else.”
The industry was slow to react, finally launching user-unfriendly Web sites to sell their recordings and attempting to stuff the genie it had unleashed, in the digitization of pre-recorded music via the compact disc, back into the bottle. But all copy-protection schemes were easily hacked, and the labels couldn’t compete with free, albeit inferior, MP3 files of their products.
“It was a demonstration that we didn’t get it, we didn’t understand the technology revolution that was happening around us,” Mr. Donnelly conceded. “And 2000 was the watershed year. Since then, our ‘hard good sales’ — CD sales — are off, I think, 40 percent.”
Such a dramatic reduction led to widespread layoffs, from which attorneys were not exempt. With the consolidation of the major-label industry (now numbering just three transnational corporations) and far fewer artists being signed, “You have a larger pool of attorneys seeking to represent a smaller pool of artists,” Mr. Donnelly said. “In that way, our business isn’t as economically viable as it once was.”
A manifestation of the music industry’s retrenchment is reduced travel expenditures, one result of which is fewer East Coast-based attorneys able to attend the annual Entertainment Law Initiative luncheon and scholarship presentation during Grammy Week in Los Angeles. “For many years, when I would negotiate a deal, even though we would do it over the telephone for the most part, at the very least we would meet on the day of closing, where the label and the artist and the lawyers would all get together in the conference room,” Mr. Donnelly said. “If at no other time, you were assured of meeting your colleague. That doesn’t happen anymore; we do everything with FedEx, PDFs. The ELI luncheon has become an important part of doing things.”
With the participation of the Sag Harbor resident Joe Serling, of Manhattan company Serling Rooks Ferrara McKoy and Worob, a meeting of attorneys, not in a conference room but on an Amagansett baseball diamond, began to make sense. “We were on a conference call organizing a breakfast we’re going to have in October for music lawyers,” Mr. Donnelly said. “There were other folks on the call who were also out here. We were all saying, ‘We’re all going to be out here in August, why don’t we get together?’ Joe organized this.”
“I’m a big fan of Bob’s,” Mr. Serling said. “He knows what he’s doing and is good to negotiate with. Bob is a very solid guy, and a very decent guy to be on the other side of deals with.”
In recent years, Mr. Donnelly co-founded Modern Works Music Publishing, a publishing administration company with a decidedly artist-friendly bent. “In an ever-shrinking music industry” the company will soon hire its ninth employee, Mr. Donnelly said.
At home, where he lives with his wife, Marie, Mr. Donnelly grows oysters from the end of his dock on Sag Harbor Cove, part of a program overseen by Cornell University to introduce oysters grown in captivity to Peconic Bay. “I don’t know who enjoys it more. Me? My grandkids? The oysters?”
Despite the rampant piracy of pre­recorded music and consequent contraction of the music industry over the last dozen years, he remains an optimist, and clearly retains a deep love and enthusiasm for his work.
“The revolution grabbed us by the throat and threw us down on the floor,” he said. “But it’s caused us to think about the business differently. One of the objections that people had for the last few years is that everyone, including the artist, was guilty of being obstructionist in trying new technologies. I’m still nervous when [music streaming service] Spotify pays 0.00027 cents per play. But I’d rather be exploring these new avenues. I’d like to leave the business in as good shape as I found it, because I love music. Even though I’ll battle with the record labels, and have had my fair share of wrestling matches with them, I don’t want to see them fail. They’re a crucial part of what makes this work. But they’ve got to change in the same way that the rest of us do.”

Comments

Great article on Bob Donnelly , the record company's still don't get it. Universal buying EMI for 1.9 billion dollars and all the majors still signing artist with large advances where's the ROI going to come from?
The record company's should cut cost,move to Brooklyn be partners with artist forget 360 deals,cut out the large salaries' you sign an act it makes money and then you get paid, just like any other business.

Mr. Donnelly gives a most succinct analysis of the industry and this article has just become required reading for my Recording Arts students.
The labels thought they were in the business of selling CDs when they were actually in the business of delivering music. If the consumer could get that without having to buy a piece of overpriced plastic, why wouldn't she?
Kudos all around on a well crafted and informative piece of journalism.
Frank Dorritie
Chair, Dept. of Recording Arts
Los Medanos College

Having worked for the William Morris Agency, Concord Records and as an indie producer since the '70s, permit me to say that Mr. Donnelly provides a most succinct analysis of the industry. This article has just become required reading for my Recording Arts students.
The labels thought they were in the business of selling CDs when they were actually in the business of delivering music. If a consumer could get that without buying an overpriced piece of plastic, why wouldn't she?
Kudos all around on a well crafted and informative piece of journalism.
Frank Dorritie
Chair, Dept. of Recording Arts
Los Medanos College